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As Americans face challenges such as increasing interest rates, inflation, and record-high credit card debt, Consolidated Credit, a leading national nonprofit credit counseling organization, is using Financial Literacy Month this April to confront one of the most significant barriers to financial wellness: misinformation.
“Credit cards and credit scores play a crucial role in almost every financial decision, yet many people hold onto misconceptions that can negatively affect their financial health,” said Sandra Tobon, Director of Housing Counseling and Community Outreach at Consolidated Credit.
Consolidated Credit highlights that some of the most harmful financial myths continue to circulate, often leading individuals to avoid using credit responsibly or overlook their existing debt.
“Many people feel embarrassed or confused when it comes to their credit. We want to remove the stigma and replace it with support and education,” says April Lewis-Parks, Consolidated Credit’s Director of Financial Education. “Good credit is possible — you just need the right tools and information.”
Top Credit Myths:
MYTH #1: A high credit score equals just paying bills on time.
Truth: While payment history is critical, it’s not the only factor. Credit utilization ratio is important, too.
TIP: Aim to use less than 30% of available credit across all accounts. If the credit limit is $5,000, try to keep your balance under $1,500.
MYTH #2: Only worry about credit scores when applying for a loan.
Truth: Credit scores can affect job opportunities, apartment rentals, insurance premiums, and even utilities. Lenders use credit score ranges to assess risk level and determine rates and terms:
- 720+ Excellent: May qualify for the best rates and rewards
- 660–719 Good: Generally approved for credit, but may have higher rates
- 580–659 Fair: Limited access to credit; higher costs
- Below 580 Poor: Often denied traditional credit or subject to very high rates
MYTH #3: APR doesn’t matter if you plan to pay your balance off.
Truth: While that’s true, more than 60% of Americans carry a balance, according to Debt.com’s latest research. The average credit card APR in the U.S. is currently over 20%, but many consumers don’t even know what theirs is.
TIP: Anything under 15% APR is generally considered favorable, but even then, carrying a balance adds up quickly.
MYTH #4: Credit card rewards are always a win.
Truth: Rewards can be useful, but only when paying off the balance in full each month. Otherwise, interest charges often cancel out any cashback or points earned.
TIP: Rewards should be a bonus — not a reason to spend more. Focus on responsible usage first, then optimize rewards.
MYTH #5: You’ll know when your debt is getting out of hand.
Truth: Many people don’t realize their debt is unmanageable until they’re overwhelmed. Warning signs include:
- Only making minimum payments
- Skipping other bills to pay credit cards
- Using one card to pay another
- Feeling anxiety or shame about credit card or loan balances
TIP: A healthy debt-to-income (DTI) ratio is below 36%. If more than a third of your income is going toward debt payments, it’s time to reassess your budget or seek help.
Empowering Consumers with Facts, Not Fear
To celebrate Financial Literacy Month, Consolidated Credit is offering free resources, webinars, and one-on-one counseling sessions to help people replace myths with actionable strategies. Resources include:
- Free downloadableand budgeting worksheets
- Bilingualand workshops for families, students, and first-time homebuyers
- Expertavailable to answer questions and develop custom plans
“People are doing their best in a complex financial world,” says Lewis-Parks. “This April, we want to give people a chance to reset with real, clear, and empowering financial education.”
Visit www.ConsolidatedCredit.org to access resources and learn more.
About: Consolidated Credit
Consolidated Credit is a nonprofit organization dedicated to helping families and individuals overcome debt and achieve financial stability through education, counseling, and personalized financial strategies. Since 1993, Consolidated Credit has helped over 10 million people find solutions to their debt challenges and build a brighter financial future.
Contact Details
Jill Randolph
Company Website
https://www.consolidatedcredit.org/
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